Question 1) B(t)=d %3D a) Mutual fund 9%. (r=.09), What mont for a balan in 40.4ears
Q: O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.40. %3| What is the firm's…
A: Given details in the question are : rRF = Risk free rate = 5% RPM = Market risk premium = 6% b =…
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Q: 13 A. Assume Skyler Industries has debt of $4,041,683with a cost of capital of 8.2% and equity of…
A: Weighted average cost of capital (WACC) refers to the average cost that is paid by a company to…
Q: If Net Worth = 14, the Market Value of Assets = 250 with duration of 8.0, the Market Value of…
A: Duration of Assets =(Net Worth/Total Assets*Duration of Equity) + (liabilities/Total Worth*Duration…
Q: An investor purchases a mutual fund share for $100.2. The fund pays dividends of $2.2, distributes a…
A: Purchase price (P0) = $ 100.2 Dividend (D) = $ 2.2 Capital gain (CG) = $ 1.1 Fees charges (F) = $ 3…
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A: Probability of occurrence of return shows the chances that a particular return will be derived from…
Q: and equity of $5,432,000 with a P%. What is Skyler's weighted average I your intermediate…
A: Sum of equity and debt = $4,268,000 + $5,432,000 = $9,700,000
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A: Given Information: In the question, probability and returns of 4 different securities are given we…
Q: A firm has common stock with D1 = $3.00; P0 = $30; g = 5%; andF = 4%. If the firm must issue new…
A: D1=$3 PO=$30 g= 5% F=4% External equity (Re) should be find out Formula: Re= [(D1/PO) /(1-F) ]+g
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A: Return on investment is the best meausre to evaluate how well your investment has perform. This is…
Q: If a mutual fund's net asset value is $23.70 and the fund sells its shares for $25.30, what is the…
A: NAV = $23.70 Selling Value =$25.30
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A: Beta of portfolio is weighted average beta of stock.
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A: Net asset value is the total assets less liabilities.
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Q: Share commom stock dividend is $1.00 , g=5.4 and required return is 11.4%, What is the stock price?
A: Current Divided (D0) = 1 Growth rate(g) =5.40% Required return (k)=11.40% Current stock price =…
Q: Suppose rRF = 4%, rM = 11%, and bi = 1.5. What is ri, the required rate of return on Stock i? Round…
A: Given information Risk-free rate=4% Expected Return of the market =11% bi=1.5 In Part 2 Risk-free…
Q: pany oan, which is charging 6.5%. 45% of the funds will come from issuing .5%. The remaining funds…
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Q: From the following mutual fund quotation, complete the blanks: (Negative amounts should be indicated…
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A: EPS is the profit of the company per outstanding share of stock.
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A: Given: Opening investment = 100 Dividend = 2 Closing investment = 95
Q: O'Brien Inc. has the following data: rRF = 6.00%; RPM = 7.00%; and b = 1.40. What is the…
A: Given the following information: Risk free rate: 6% Risk premium: 7% Beta: 1.40
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- Explain why y0u disagree 0r agree with the f0ll0wing statements. The answer sh0uld n0t be m0re than 3 sentences Step 1 Define Treasusy BondS & Corporate Bonds Step 2 Difference between annuity due and ordinary annuity Step 3 Treasury b0nds are riskier than c0rp0rate b0nds. All 0ther things held c0nstant; the future value 0f an 0rdinary annuity is always having a higher future value than annuity due. All 0ther things held c0nstant, the price 0r interest rate risk 0f sh0rt-term b0nd is always l0wer than l0ng-term b0nd.Perlyn makes deposits of 100 at time 0, and X at time 3. The fund grows at a force of interest t2 t 2 0. 100 The amount of interest earned from time 3 to time 6 is also X. Calculate X.rch LG2 PS-4) Future values For each of the cases shown in the following table, calculate the future value of the single cash flow deposited today at the end of the deposit perk if the interest is compounded annually at the rate specified. AAVA** C D Single cash flow $ 200 4,500 10,000 25,000 37,000 40,000 Interest rate O E 8 9 10 11 Deposit period (years) 20 7 10 в гро
- 03(B) lime value ofp Money:- your your Sisler borrows $1,000 and evpleyee pramises to repay $ 2,000. o you wanl to atleast a 5 relum anyour loanig within how many ist She years muQ12- Assuming that the interest rate is 6%, which of the following investments has a higher duration? Must show work to get credit. Period 1 Period2 Period 3 X 40 40 40 Y 10 10 100Suppose the term structure of risk-free interest rates is as shown below: 5 yr 7 yr 10 yr 20 yr Term 1 уг 2 yr 3 yr 3.24 3.79 4.09 5.05 2.07 2.46 2.71 Rate (EAR %) a. Calculate the present value of an investment that pays $1,000 in two years and $3,000 in five years for certain. b. Calculate the present value of receiving $100 per year, with certainty, at the end of the next five years. To find the rates for the missing years in the table, linearly interpolate between the years for which you do know the rates. (For example, the rate in year 4 would be the average rate in year 3 and year 5.) c. Calculate the present value of receiving $1,800 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.)
- 28. Consider a bank dealer who faces the following spot rates and interest rates. What should he set his 1- year forward ask price at? Bid So(S/E) S1.42 = €1.00 F360(S/E) A. $1.4324/€ B. $1.4358/€ C. $1.4662/€ D. $1.4676/€ Ask $1.45 = €1.00 Borrowing 4.25% APR is je 3.10% APR Lending 4% APR 3% APR(Related to Checkpoint 5.6) (Solving for i) You are considering investing in a security that will pay you $1,000 in 27 years. a. If the appropriate discount rate is 12 percent, what is the present value of this investment? b. Assume these investments sell for $515 in return for which you receive $1,000 in 27 years. What is the rate of return investors earn on this investment if they buy it for $515? a. If the appropriate discount rate is 12 percent, the present value of this investment is $nothing. (Round to the nearest cent.)- F7 Z (Related to Checkpoint 5.6) (Solving for ) You are considering investing in a security that will pay you $2,000 in 28 years. a. If the appropriate discount rate is 12 percent, what is the present value of this investment? b. Assume these investments sell for $853 in return for which you receive $2,000 in 28 years. What is the rate of return investors earn on this investment if they buy it for $853? a. If the appropriate discount rate is 12 percent, the present value of this investment is $. (Round to the nearest cent.) b. The rate of return investors can earn on this investment if they buy it for $853 is %. (Round to two decimal places.) @ 2 F2 W S X command # 3 80 F3 E D $ 4 C F4 R F % 5 V FS T G A 6 MacBook Air B A F6 Y & 7 H dd F7 U N * 20 8 J DII FB 1 M ( 9 K MOSISO DD F9 ER O V- 1 H O L 4 F10 P > command .... . e P11 + I { 1 [ ? option #1 1 Ne 41) F12 } 1 "AVG and c delete
- We have purchased a security with the following payment schedule: Year 1 2 3 Payment $100 S150 S400 If the present value of this investment is $580.59, what is the rate of return (or interest rate) ?13. Suppose that an FI holds two loans with the following characteristics. Annual Spread between Loan Rate and FI's Cost of Funds Loan X₁ 0.45 0.55 1 2 5.5% 3.5 Annual Fees 2.25% 1.75 Loss to Fl Expected Given Default Default Frequency 30% 20 3.5% 1.0 P12 = -0.15 Calculate the return and risk on the two-asset portfolio using Moody's Analytics Portfolio Manager.Assume you have the following asset and liability in your balance sheet Asset - Bond AModified Duration = 1.5 yearsValue = RM1 million Liability - Bond BModified Duration 2.6 yearsValue = RM2 million a. Calculate the duration gaps?b. What is the expected change in Net worth if interest increases by 1%?c. What should or could you to achieve immunised balance sheet?